Generation X: Taking Retirement into Their Own Hands

Larry Olivarez

With all the attention paid to baby boomers, it’s hard to believe another generation is rapidly approaching retirement age. In 2015, the first wave of Generation X is turning fifty. And Gen Xers are taking retirement into their own hands. According to the recent Ameriprise Financial Retirement 2.0 study¹, an overwhelming majority of Gen X say they started saving and investing early for retirement. They’re also looking to redefine retirement. As this generation heads into their golden years, health, wealth and work are their top priorities.

Thoughts on Work
The Gen Xers see work as an important part of their lives. Half of the group is currently working to achieve financial stability (55%) while a third say they can’t afford not to work (33%). With retirement on the horizon, Gen X does not plan to say goodbye to work anytime soon. Instead, they plan to continue working in retirement, but in a way that is more meaningful than just earning a paycheck. Nearly 3 out of 4 survey respondents plan to stay in the workplace beyond retirement age in order to pursue something meaningful (73%).

Staying mentally and socially engaged tops the list of priorities for work in retirement. Gen Xers anticipate work at this time in their lives to be less stressful (50%), more rewarding (33%), socially meaningful (24%) and more interesting (18%). They see themselves possibly working part-time, as consultants or running their own business.

Money Matters
For the most part, this group seems to be taking ownership of saving for retirement, with 77 percent reporting they are taking steps to save enough to afford the lifestyle they want. In addition, 64 percent are investing with the goal of generating extra income for their retirement. Not everyone is on board, however. A minority of Gen Xers in this study say they haven’t really planned for their retirement (22%) and a few have not even thought about it (1%).

The majority of Gen Xers surveyed have taken advantage of an employer-sponsored savings plan. Eight in 10 report currently saving in a 401(k), while seven in 10 regularly put money aside in an IRA or similar account. Nearly one third of this group expects these savings to be a main source of income in retirement (29%). Far fewer respondents expect to rely on Social Security or pensions to help fund their new lifestyle—a significant change from previous generations.

Goals and Challenges
Generation X is confident about their ability to save for retirement, but they maintain some worries as they consider their future. Despite the Great Recession, 27 percent of Gen Xers managed to increase the amount they save. Some report investing more conservatively. Owing to their disciplined nature, it’s no wonder this group has either already paid off major debts (23%) or is confident they are on a path to do so in the future (63%).

This group also plans to retire on their own terms while maintaining their current lifestyle in retirement (65%), and with some anticipating an ability to live more comfortably (22%). The top retirement activities they envision are:

Travel (80%)
Relaxing (64%)
Staying in shape (50%)
Pursuing hobbies (50%)
Spending time with grandkids (48%)
Taking on volunteer work (36%)

While, Generation X is confident about their ability to save for retirement, but they maintain some worries as they consider their future. Some respondents are concerned about potential costs of caring for aging parents (46%) and supporting children (22%). The cost of healthcare also weighs on them with 75 percent saying it’s one of their concerns.

The Role of Financial Advice
Gen Xers who work with a financial professional appear to be more proactive with retirement saving. With the support and insight of a financial expert, they are more likely to be on track to save enough to live comfortably in retirement (38%), cover emergency expenses (35%) and leave a legacy (17%).

Talk to a financial advisor to explore your dreams for retirement and what you can do to get ready for your financial future.

###

Larry Olivarez, Jr. CEP^®, CRPC®, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Corpus Christi, Alice, and surrounding areas of South Texas.    He specializes in fee-based financial planning and asset management strategies and has been in practice for 13 years. To contact him please call 361.654.1900 in the Corpus Christi office located at 711 N Caranchua Suite #1701 or 361.668.1212 in the Alice office located at 604 E. Second St.

¹The Retirement 2.0 study was created by Ameriprise Financial utilizing survey responses from 1,518 Americans ages 35 to 50 with investable assets of at least $100,000. The online survey was commissioned by Ameriprise Financial, Inc., and conducted by Artemis Strategy Group from February 27 – March 15, 2015.

Ameriprise Financial Services, Inc. Member FINRA and SIPC.

© 2015 Ameriprise Financial, Inc. All rights reserved.                                  File # 1261681


Generation X: Taking Retirement into Their Own Hands Larry Olivarez With all the attention paid to baby boomers, it’s hard to believe another generation is rapidly approaching retirement age. In 2015, the first wave of Generation X is turning fifty. And Gen Xers are taking retirement into their own hands. According to the recent Ameriprise Financial Retirement 2.0 study¹, an overwhelming majority of Gen X say they started saving and investing early for retirement. They’re also looking to redefine retirement. As this generation heads into their golden years, health, wealth and work are their top priorities. Thoughts on Work The Gen Xers see work as an important part of their lives. Half of the group is currently working to achieve financial stability (55%) while a third say they can’t afford not to work (33%). With retirement on the horizon, Gen X does not plan to say goodbye to work anytime soon. Instead, they plan to continue working in retirement, but in a way that is more meaningful than just earning a paycheck. Nearly 3 out of 4 survey respondents plan to stay in the workplace beyond retirement age in order to pursue something meaningful (73%). Staying mentally and socially engaged tops the list of priorities for work in retirement. Gen Xers anticipate work at this time in their lives to be less stressful (50%), more rewarding (33%), socially meaningful (24%) and more interesting (18%). They see themselves possibly working part-time, as consultants or running their own business. Money Matters For the most part, this group seems to be taking ownership of saving for retirement, with 77 percent reporting they are taking steps to save enough to afford the lifestyle they want. In addition, 64 percent are investing with the goal of generating extra income for their retirement. Not everyone is on board, however. A minority of Gen Xers in this study say they haven’t really planned for their retirement (22%) and a few have not even thought about it (1%). The majority of Gen Xers surveyed have taken advantage of an employer-sponsored savings plan. Eight in 10 report currently saving in a 401(k), while seven in 10 regularly put money aside in an IRA or similar account. Nearly one third of this group expects these savings to be a main source of income in retirement (29%). Far fewer respondents expect to rely on Social Security or pensions to help fund their new lifestyle—a significant change from previous generations. Goals and Challenges Generation X is confident about their ability to save for retirement, but they maintain some worries as they consider their future. Despite the Great Recession, 27 percent of Gen Xers managed to increase the amount they save. Some report investing more conservatively. Owing to their disciplined nature, it’s no wonder this group has either already paid off major debts (23%) or is confident they are on a path to do so in the future (63%). This group also plans to retire on their own terms while maintaining their current lifestyle in retirement (65%), and with some anticipating an ability to live more comfortably (22%). The top retirement activities they envision are: Travel (80%) Relaxing (64%) Staying in shape (50%) Pursuing hobbies (50%) Spending time with grandkids (48%) Taking on volunteer work (36%) While, Generation X is confident about their ability to save for retirement, but they maintain some worries as they consider their future. Some respondents are concerned about potential costs of caring for aging parents (46%) and supporting children (22%). The cost of healthcare also weighs on them with 75 percent saying it’s one of their concerns. The Role of Financial Advice Gen Xers who work with a financial professional appear to be more proactive with retirement saving. With the support and insight of a financial expert, they are more likely to be on track to save enough to live comfortably in retirement (38%), cover emergency expenses (35%) and leave a legacy (17%). Talk to a financial advisor to explore your dreams for retirement and what you can do to get ready for your financial future. ### Larry Olivarez, Jr. CEP^®, CRPC®, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Corpus Christi, Alice, and surrounding areas of South Texas. He specializes in fee-based financial planning and asset management strategies and has been in practice for 13 years. To contact him please call 361.654.1900 in the Corpus Christi office located at 711 N Caranchua Suite #1701 or 361.668.1212 in the Alice office located at 604 E. Second St. ¹The Retirement 2.0 study was created by Ameriprise Financial utilizing survey responses from 1,518 Americans ages 35 to 50 with investable assets of at least $100,000. The online survey was commissioned by Ameriprise Financial, Inc., and conducted by Artemis Strategy Group from February 27 – March 15, 2015. Ameriprise Financial Services, Inc. Member FINRA and SIPC. © 2015 Ameriprise Financial, Inc. All rights reserved. File # 1261681
2015 Alice Business Today - September 2015